This invention relates to a method and system for improved collateral monitoring and control and, more particularly, to a computerized system which automatically receives transaction messages, reviews account information, and determines whether sufficient collateral is provided in accounts in view of risk considerations associated with the collateral, investments and currencies.
There are many computerized systems on the market today used in banks, securities firms, and the like. For example, U.S. Pat. No. 4,346,442, entitled Security Brokerage-Cash Management System, was assigned to Merrill Lynch, Pierce, Fenner & Smith Inc. of New York and issued in 1982. This patent is directed to an early cash management system which used data processing to improve securities brokerage/cash management supervision. It allows the financial services firm to provide for automatic investment of free credit cash balances in interest bearing accounts, so that an investor that has free cash in his/her investment account automatically receives appropriate interest payments.
U.S. Pat. No. 5,262,942 entitled Financial Transaction Network is directed to a financial network for maintaining a number of mutual fund portfolios operating in different currencies. The host processor acts as a communications switch validating incoming transaction requests and routing them to a central transfer agent system for execution. The host processor maintains central records that can be queried through the host.
U.S. Pat. No. 4,713,761 entitled System for Centralized Processing of Accounting and Payment Functions is directed to a computer implemented system for determining and accounting for the cost of transactions. The system particularly determines and accounts for the cost of shipping goods. The system requirements include an input device which is located at a shippers location and a central data processing facility. In other words, this system tracks expenses as well as products.
U.S. Pat. No. 5,025,373 entitled Portable Personal-Banking System is directed to a portable personal banking system comprising a host computer and at least one portable terminal among a variety of terminals including automatic teller machines and personal computers. The portable terminal provides a range of banking services over an automatic dial-up telephone connection to the host bank computer. The personal terminal comprises a keyboard and display capability with minimal key requirements and display capacities. This patent deals with concerns regarding remote computers versus bank servers and issues of capability and access.
In today's global marketplace, banks, financial institutions, securities firms, insurance companies and other financial institutions must be concerned with maintaining appropriate collateral for securing loans and the like. Each institution sets up its own lending requirements, and collateral needs for each of its customers. However, in today's global marketplace, the collateral may depreciate in value faster than the repayment of loaned funds; for example, if a loan in U.S. dollars is being secured against a foreign security, the foreign security could depreciate in dollar terms by a decrease in price of the security, or a decrease in the foreign currency value against the U.S. dollar. Accordingly, it is desirable to provide a collateral management tool that controls and tracks collateral against liabilities and can be used to determine whether or not to extend margin against securities or other products such as derivatives, tri-party agencies and insurance letters of credit.